Wealthy resume hunt for properties in paradise

Luxury home-buying in the Caribbean is bouncing back this year, with real estate agents citing the improved economic picture in the U.K. and U.S., a weaker dollar and a fall-off in prices as reasons for the hike in sales.

"We have absolutely seen a comeback," said Christian de Meillac, a senior negotiator in real estate agent Knight Frank's international sales division.

"The Caribbean is quite seasonal and the real buying season tends to be over the winter – November to April. Towards the end of last season we had a big increase in viewings. Over the summer period, we had some transactions and now, we are having an even stronger increase."

The Caribbean was hit hard by the financial crisis, with luxury property prices on some islands down by 30 percent since 2007, according to Knight Frank. However, sales volumes are now increasing on islands like Barbados and the British Virgin Islands (BVI), boosted by a renewed confidence in the global economy.

"This winter season has been far better than the last three, in terms of transaction reports everywhere in the Caribbean," said James Burdess, a director at real estate agent Savills.

"There is still an awful lot of money around and the wealthy are wealthier than they were five years ago. Economies are getting stronger, but I think it is as much a psychological feeling and lifestyle – if you have the money who wouldn't want to be in the Caribbean?"

Knight Frank saw the number of sales of prime properties on Barbados and BVI rise 10-15 percent last year.

"Prices have come down in Barbados and rental demand has gone up," said de Meillac. "We have also seen good increases in demand for property in the BVI, particularly Tortola."

Burdess said he was also seeing high demand for properties in Antigua, fueled by the introduction of a citizenship-by-investment program and the development of the 141-acre Pearns Point, which features 59 residences, a five-star hotel and seven beaches.

The region has also benefited from a weaker U.S. dollar, as properties are typically sold in this currency. Since the start of 2013, the dollar has depreciated by around 4.8 percent against the euro, to $1.38.

"The weak dollar has fueled interest from euro-denominated buyers. An increase in enquiries from Swedish, French and Eastern European was particularly noticeable in 2013," said Knight Frank in a report earlier this year.

Savills

Burdess added that investors were ready to invest in the area after keeping their money on the sidelines for five years.

"At the end of the day, buying in the Caribbean is a discretionary purchase – your other choices might be a ski chalet in the Alps or maybe a city pied-a-terre… they are looking to buy, and now people see value in the Caribbean," he said.

Savills recently listed the most expensive property to ever come to the open market on Barbados, with a guide price of $55 million. The six-bedroom villa is located on the west coast on a 2.56 acre plot, with a swimming pool, tennis court, gym and snooker room.

De Meillac and Burdess agreed, however, that interest was strongest for properties around the $1 million price bracket, with healthy demand also in place for $3-4 million standalone villas.

Burdess forecast that sales would continue to bounce back throughout the rest of the season. "Tourism is up in just about every location… and now real estate transactions are following along," he said.